Nifty May Engage Range-Bound Trading While Asia-Pacific Markets Are Closed

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Most Asia-Pacific markets closed on Monday following the new year. Indian stock market Nifty 50 traders may see range-bound trading strategies at the calendar year’s opening as it lacks directional cues from the stock market.

Benchmark indices look ambiguous at the start of the new year, thanks to the absence of directional cues as the Asian stock market was closed Monday following the New Year.

Nifty 50, India’s stock market index, sees positive indications from the chart structure. It also expects that it will continue into the new year. According to Sameet Chavan, chief analyst for technical and derivatives at Angel One, “The broad-based buying in the last week has levitated market sentiments and can be seen as a sign of progression as we outclass our major global peers.”

Chavan added, “As far as levels are concerned, 18,000 is expected to cushion any short-term blip, with the sacrosanct support around 17,800 for the time being. While on the higher end, a decisive move above 18,400-18,450 would affirm the continuation of the uptrend in the market.”

In conjunction with this, traders are learning to utilise range-bound strategies to increase their odds of success. Range bound trading, as defined in Investopedia, “Refers to a method in which traders buy at the support trendline and sell at the resistance trendline level for a given stock or option. Traders place stop-loss points just above the upper and lower trendlines to avoid having heavy losses from high-volume breakouts.”

Pawan Kumar Nahar of Business Today noted, “Since it is the beginning of the new series, no shares are banned in the F&O segment for the first trading session of 2023, that is, January 2, 2023. Derivative contracts in security are banned when it crosses 95 per cent of the market-wide position limit (MWPL). No new positions can be created in the derivative contracts of said security. This prohibition is lifted when the open interest in the stock drops below 80 per cent of the MWPL across exchanges.”

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